Key Idea: Start Simple

Key Question:

Marty had been in the publishing business always working as a sales person. When he envisioned his own print product, he figured he needed $1.2 million dollars, then, spent years looking for investors. Finally, he used his own savings to do a test and it revealed he had a viable product. By keeping his job and working on the publication at night, Marty got the business off the ground.
Q: Do you think Marty's strategy is typical or atypical?
A: What Marty did is very common. Banks do not make startup business loans and so he went looking for private funds. After exhausting all of the prospects among his friends and business associates, he did the only thing he could do: Marty used his savings of $30,000 to jump start his business. By doing everything himself and working so many hours that many times he slept at his office, he set the stage for what has become a triple digit million dollar business.

Marty found himself working into the night because he had to do his regular job from 8-5. This is run-of-the-mill for most small business owners. Long hours go hand-in-hand with owning a business. Even when there are employees, the responsibility for hundreds of details fall on the shoulders of the owner.

Q: Why do so many people start a business knowing it will take a tremendous time commitment, especially at the beginning?

A: Many reasons, including: 1) Many find it impossible to work in a job and be satisfied. In fact, most people who start a business don't do it for the money, they do it because they feel their talents have never been used in a single job. 2) Many simply want to be in charge. 3) Some see that no one is filling an obvious need. 4) Many people start a business because they can't find a job. Immigrants face language and cultural problems and often start a business because that's their only choice. 5) Some even start a business, knowing it will take huge amounts of time, because they would rather work than do anything else. Work should bring pleasure and there's nothing wrong with doing what you prefer to do. The newspapers reported that prior to joining the Clinton Administration, Janet Reno kept a sleeping bag in her office for those times when she preferred to work nearly all night. 6) In today's work environment, most key employees of large organizations work long hours. So, if
you're going to work 60 hours a week, why not invest your time in your own business?

Think about it

Can you start a business or develop and test a new product idea without raising money? Are you willing to work day and night to explore your ideas?

Clip from: Boardroom, Inc.

Stamford, Connecticut: In this episode of the show we go inside one of the most productive businesses in the world (using the ratio, gross income to total number of employees). Where the Fortune 500 companies average under $300K per employee; in this small business, it is over $1M per employee.

How can any business be so productive? You'll learn right here.

Marty Edelston, founder of Boardroom, Inc. started this company in 1971. Today they are the publisher of the world's largest subscription-based newsletter, BottomLine Personal; this business with just 78 employees will do over $80 million in sales. This is about five times the productivity rate of the Fortune 500 companies.

He believes these results come from a powerful process he calls, I-Power. Marty believes every person has an endless supply of ideas, especially ideas to improve their workplace. Every week every employee is asked to answer two questions: What can I do to improve my work area? And, what could others do that would cause my work area to improve? Simple, brilliant, easy to do, so what are we waiting for?

Marty was 47 with three children at home when he quit his job as a salesman in the publishing business. He had worked for some of the country's biggest companies and felt there was a need for a publication that ". . . helps people live their lives in this increasingly hostile world."

Boardroom Inc.

Start Simple

HATTIE: (Voiceover) When they hear about Marty, business owners and leaders in big corporations scratch their heads and say, `How does he do it?' He treats people with respect, and he is more fascinated with the way the mind works than he is his balance sheet. Here's the story from the beginning.

MARTY: One day I got a call from Norman Pakoritz, the editor of Commentary, one of America's leading intellectual publications, wanting me to be the business manager. So we got together and I did that. So I moved, and I sold advertising, promoted circulation, started a book club, published greeting cards, started a record club. It was very exciting. It's for a non-profit organization, and it's a superintellectual publication; there wasn't too far I could take it.

And in the meantime, some thoughts started seeping in, that I liked the business books. They told you what to do, how to sell, certainly how to plan, how to fire, how to hire.

Whatever it was there's a book on it, and they're all in--some are better than others, but it's worth it. I'd learned early on that I couldn't spend money on books unwisely because it's so good to take ideas and expose it to others. One of the other people, who's a friend -- I'm just writing a note, gonna have lunch with him in a week or so -- said, `Well, why don't you put little things in your publication, too? There are great pearls that get lost, wonderful three lines, six lines in this magazine--in Automotive Age, in Rubber World, whatever it is, this stuff is there. Why don't you pick that stuff up.' Great. So I wound up making this amalgam of stuff. I'd look--it took me years to look for money--or I looked for money. I started the recession of the early '70s.

HATTIE: You personally started the recession of the '70s?

MARTY: Yeah. Business was great up to that time, and every time I took a step forward with an idea, the financial world moved backwards. So the great Fred Adler, in an interview said, `Happiness is positive cash flow,' which was very meaningful. I thought that means you gotta make a lot of money. Well, you don't. You just have to see to it that the stuff that comes in is more than the stuff that goes out. And that's what you want to get to.

So I went to a number of periodicals 'cause I knew a lot of people, and said, `I'll tell you what, you run this ad'--and I had the best copywriter in the business--actually, his picture is on the wall there--prepare an ad for me--`You run this ad and I will give you a share of my business, one share of stock for every paid subscriber that I get from your publication,' which was fine, except--conceptually, so you could do it with nothing, and it cost the periodicals nothing 'cause they would only use it when they had an empty space, and God doesn't bring down all the ads and all the editorial and put it together and have it work out to a perfect printing form. So in one month or another there had to be some open space. So I guess I had six or eight periodicals that went along. Unfortunately, the ads didn't produce, but I took the copy and put it into a direct mail form, and somewhere along the way--in one of the framed things here -- I did my initial test, which was either 12,000 pieces or 17,000 pieces.
It's nothing. I mean, you can't do what I did then in direct mail. I mean, w...

HATTIE: You tested with the small sample. In your view, 17,000 back then worked, but it wouldn't work today.

MARTY: Well, it shouldn't have worked then but it did. We learned a lot. But most important, the concept was good, got a good response and had some--developed a relationship with the great Peter Drucker, who wanted me to go visit him and just discuss that. He says, `Marty, I'm gonna be in New York, and I was gonna do a zillion things, but I couldn't do it all. How do you do it? And how do I find a good editor?' which was something important. So we got together, and then, `How many of these things you gonna start at once?' `Just one a year.' He says, `Well, good, you're the editor.' `Me? I can't spell, I can't do this, I never thought of it, it'--I mean, all the things I had done, I had never thought of being the editor. `Everyone is smart, I'm a salesman--boy, am I a good salesman, but I gotta find a good editor. Now you have drive, you have curiosity. You will be it.'

And that was a very important moment, 'cause then I didn't have to be big, I didn't have to be Time-Life or American Express; I just had to strive for ideas, what's the truth. And I've been an incredible driver for the truth ever since.